Business readies for election fought on IR and wages

Corporate Australia has urged the next government to provide certainty on energy policy and address a looming skills shortage as it expressed concern over industrial relations and wages policies heading into the election.

Bill Shorten, pictured on the first official day of the 2019 election campaign, has flagged changes to the minimum wage and workplace bargaining. Credit:Justin McManus

The Australian Industry Group chief executive Innes Willox said it was positive that there had been an early focus on the economy between the two major parties.

"But that has to be fleshed out with a lot more policy and clarity from both sides around how they would set up Australia for future growth at a time when big parts of the Australian economy are slowing," he said.

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While some policy ideas put forward by the Australian Council of Trade Unions (ACTU) were "alarming", he was confident Labor's door would be open to business for consultation on any major reforms should it form government.

"We’ve had assurances that there will be consultation and we have no reason to doubt that," Mr Willox said. "They’ll be under pressure to do things ... [but] they have to balance that with the good of the national economy."

The Business Council of Australia, which represents the country's largest companies, on Thursday warned that sector-wide bargaining - which Labor is expected to allow for workers in low-paid industries - would lead to more strikes and put jobs at risk by preventing companies from innovating and adapting to technological change.

"The most risky thing we could do is ... go to a system where a union in another part of the country says 'this is the standard for this whole industry across the country', irrespective of the circumstances," BCA chief executive Jennifer Westacott told Sky News.

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Ms Westacott said Australia had "made a mess" of energy policy, and called for long-term national energy and climate change policies to stabilise power prices and provide certainty to business.

While forming its "living wage" policy, Labor resisted calls from the ACTU to set the minimum wage at 60 per cent of the median full-time wage.

One industry leader, who declined to be named, said that was received positively in business circles as a sign Labor would not be held captive by the union movement in government.

“There’s been a lot of discussion about that,” the business figure said.

Peter Strong, the chief executive of the Council of Small Business of Australia, which represents about half a million small businesses, said some of his members would not be able to afford wage increases if they were not accompanied by productivity gains.

“My members know that wages aren’t low," he said. “We view it as very dangerous if you do it without any proper plan behind it. If you just increase wages with the flick of a switch ... it will cost people jobs.”

If you just increase wages with the flick of a switch ... it will cost people jobs.

COSBOA CEO Peter Strong

The Fair Work Commission increased the minimum wage by 3.5 per cent last year, and 3.3 per cent in 2017. That was above the rate of overall wage growth and inflation at around 2.1 per cent, but from a lower base.

Australian Council of Social Services data shows the share of working Australians living in poverty is growing, which Labor has used to argue the current system is not working.

Labor proposes changing the law so the Fair Work Commission has to put the "highest priority" on keeping Australians out of poverty when setting the minimum wage - along with existing obligations to promote the economy, productivity growth and business competitiveness.

Growing energy costs

Mr Strong said growing energy costs were a crucial issue for small business, but "we’re not sure that either party has got anything that makes the energy problem go away”.

Skills and training was another area of priority for business, said James Pearson, chief executive of the Australian Chamber of Commerce.

“We’ve seen the number of apprenticeships fall off a cliff in the last few years," he said. "We want to see a significant increase in the number of people in training so that Australians are trained for the jobs of today and tomorrow."

Atlassian co-chief executive Mike Cannon-Brookes said he had all but given up on hope that innovation policy would become a priority for the key political parties, but he expected climate change and energy to be major factors in the campaign.

"I don’t expect to see a whole bunch of policies around innovation, startups, tech. It’s not something I expect either party to turn up with. As disappointing as it is, it hasn’t been a vote winner in the past," he said.

"Climate on the other hand, energy, these are going to be huge."

'Ideological debate'

Adrian Merrick, CEO of power company Energy Locals and a former director at EnergyAustralia, said he hoped the election did not turn into another "ideological debate" at a time when both parties need to develop and support bipartisan policies that worked for Australia.

"We can't home in on just a single issue, like electric vehicles - it's insane," he said.

Chief executive of the Australian Investment Council, Yasser El-Ansary, said the campaign could set the tone for how willing businesses were to invest in innovation, noting some parts of Australia were still concerned about the impact of new technologies.

"Every word can have a very significant impact on the appetite to invest in technology," he said. "The task here is to lead from the front to help engender more support for innovation in our market."